KKR may double down on APAC data centers after Singtel deal: report

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KKR recently invested US$806 million in a 20% stake in Digital InfraCo, Singtel’s regional data center business. BMI, the business intelligence unit of Fitch Solutions, expects more to come.

Investing in Digital InfraCo would provide KKR with a base of 15 data centers across Asia Pacific by 2025, according to data processed by BMI.

This puts KKR’s global total to 64 data centers, including active and planned developments. Asia Pacific makes up 23.5% of the firm’s global presence.

Previously, the private equity major announced its US$1.7 billion commitment to invest in Asia Pacific’s “transformed” real estate space. But it’s part of a larger global strategy: KKR previously bought out data center firms CyrusOne and Global Technical Realty for US$15 billion and US$1 billion, respectively.

Asia appears to hold potential for KKR, with Colliers data showing that Asia Pacific’s data center capacity grew 300% over the last five years. With AI increasing demand, the real estate agency expects the market to grow to US$53 billion by 2028 at a compound annual growth rate of 12%.

In addition, BMI projects the SEA-6 economies – consisting of Singapore, Thailand, Indonesia, Malaysia, Vietnam, and the Philippines – to spend US$105 billion in cloud computing services in 2027.

As demand for data center-related services in Southeast Asia increases, BMI believes that KKR may consider a full or partial carve-out by around 2027. This is a move Singtel will likely take as well, considering the high costs of maintaining its large pool of subsea cables, towers, and other digital infrastructure assets.

See also: Mapping out SEA’s digital defenders